Why is Black Unemployment so High?

For more than half the 20th century up until today, black unemployment has been double that of white unemployment. When the question comes up asking why is the black unemployment rate so much higher than white unemployment, the more common and easy answer is simply discrimination. Discrimination cannot be the only answer let alone best answer to why the unemployment rate is so bad for blacks. This is because black unemployment looked completely different from 1900 to about 1954. Blacks had more participation in the labor market than whites at this time. Black teen labor force participation was equal to or greater than white teen labor force participation all the way up until around 1965 according to Walter WIlliams, a columnist and former economics chair at George Mason University. Altogether Black unemployment was about 15% less than white unemployment. Now in the mid 2000s blacks are far behind whites as you can see in this chart.

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Discrimination is alive and well in today’s society, as we see institutionalized racism everywhere in today’s culture. For example, the Oklahoma University frat house racist chants that were brought to surface by media. The only difference from 1900 and today is that discrimination was not frowned upon. Discrimination by race was something that was widely accepted in the early 1900s. So why would there be a lower black unemployment rate than white unemployment rate in the 1900s? And why has that made a drastic switch heading into more modern times? I feel one of the only ways to explain this is minimum wage. Minimum wage laws were not set until the 1930s, therefore minimum wage did not have the same effect on unemployment than it does today. Blacks with minimal education would not have too much trouble finding a minimum wage job in the early 1900s. However, with minimum wage laws in place and the raising of minimum wage along with growing of new technology has destroyed many minimum wage jobs since the 1970s. Something that comes to mind with the correlation of minimum wage jobs and black unemployment is a lack of education. In this chart, this shows the education gap between whites and blacks.

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The percentage of blacks with a degree or higher is significantly lower than whites. So overall, I believe that many blacks that are unemployed are suffering from structural unemployment in which they do not have the education for many of the modern day high-skill jobs that are becoming more and more available. A lack of education is why the black unemployment rate is so high.

http://www.bls.gov/cps/cpsrace2013.pdf

http://www.bls.gov/opub/mlr/1984/11/art3full.pdf

https://www.census.gov/prod/2012pubs/acsbr10-19.pdf

http://humanevents.com/author/walter-williams/

-Richard Barber

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3 thoughts on “Why is Black Unemployment so High?

  1. jacobmedina2016

    Interesting read and a unique perspective! I would have hoped that the employment gap would be closing over time as black students gain more access to higher education and less discrimination occurs in the workplace. However, the statistics shown in this post show a disappointing reality.

    Reply
  2. krraym16

    Very interesting post. Leads me to inquire more about the wealth gap and how it affects the education levels. Lower income black communities may put more emphasis on lower-end jobs due to availability and the likelihood of acquisition. Consequently, less emphasis may be put on education reducing the ability to achieve higher income jobs because they seemed less probable. This will be a reoccurring cycle that will ultimately increase the wealth gap and income equality. If we increase minimum wage even these lower end jobs won’t be as obtainable

    Reply
  3. Victor Matheson

    Great post and good thinking about the issue. So let’s see if Richard is right. Last month the unemployment rate among blacks with a high school diploma was 9.8% while it was 4.9% among whites with a high school degree. Among college grads the white unemployment rate is 2.2% while it is 4.1% for blacks. In fact, over every educational level, blacks have a higher unemployment rate than whites. So, this is a nice theory, but it doesn’t seem to hold up under more scrutiny. That being said, this is exactly how to do good economics – pose a question and come up with clear possible answers.

    Reply

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